Gold firmed near a record high reached in the previous session, while the world's largest gold-backed ETF reached an all-time high on Thursday as investors continued to worry that attempts to contain the euro zone debt crisis would either fail or stoke inflation.

Holdings on the SDPR Gold Trust rose around 17 tonnes -- worth nearly $700 million -- to a record of 1,209.499 tonnes as of May 12 as retail investors turned to the metal as a hedge against volatile currencies and economic uncertainties.

Spot gold was at $1,237.00 an ounce by 0613 GMT, up 65 cents from New York's notional close on Wednesday, when it roared to a record $1,248.15 on worries that a $1 trillion European rescue package will not solve the euro zone debt crisis.

Bullion has gained around 12 percent this year as investors ditched the euro in favor of the metal. Silver, platinum and palladium weakened after recent gains.

I think it's trying to take another bet at $1,250 again, said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore.

There's always the question of a loss of confidence in paper currencies when governments have such big deficits. This loss of confidence will definitely be there to stay.

U.S. gold futures for June delivery fell $6.2 an ounce to $1,236.9 an ounce.

The euro inched up against the dollar on Thursday but was vulnerable near a recent 14-month low on persistent worries about the debt crisis in the euro zone and the impact of fiscal measures on the region's growth.

The Greek bailout does not address the underlying fiscal problem -- the absence of EU taxing and spending authority. Investors, fearing the worst, are hedging by putting more of their portfolios into gold, and the price of gold rises, University of Maryland professor Peter Morici said in a note.

Simply, the European Central Bank will have to print lots more money to buy European government bonds to keep the system afloat and a weak euro, inflation and rising interest rates will follow.

In other markets, Japan's Nikkei average rose over 2 percent to a one-week closing high on Thursday after Spain outlined measures to cut its deficit, easing fears the Greek debt crisis could spread in Europe and boosting exporters such as Advantest <6857.T>. <.T>

But dealers believe the scale of Greece's fiscal problems could make the country default despite the rescue package, which may then trigger a string of defaults by other countries such as Spain, Portugal and Italy.

(Editing by Ed Lane)